Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Textbook Question
Chapter 2, Problem 21E
Defective work
Herbert Electronics manufactures an integrated transistor circuit board for repeat customers but also accepts special orders for the same product. Job No. JM4 incurred the following unit costs for 1,000 circuit boards manufactured:
When the completed products were tested, 50 circuit boards were found to be defective. The costs per unit of correcting the defects follow:
Record the
- a. If the cost of the defective work is charged to factory
overhead . - b. If the cost of the defective work is charged to the specific job.
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Assume that the defective goods were charged to all jobs, what is the cost
transferred to finish goods at the end of the year?
KW Inc. manufactured coil over springs for cars. During this year, KW Inc. manufactured
200 units coil over springs. After final inspection, it was determined that 15 units were
defective. The cost per unit to rework the defective units were the following: P100 for
direct materials, P160 for direct labor and the appropriate factory overhead rate.
The following were the unit cost for the 200 coil over springs:
Direct materials P800
Direct labor
P350
Applied overhead 160% of direct labor cost
(150% in case defective units were charged to specific order)
342,000
O 335,000
349,740
342,500
Journal entries to correct defective work. Columbus Fabricators manufacture golf carts and other recreational equipment. One order from Wisconsin Wholesale Company for 1000 carts showed the following costs per unit: direct materials, $40, direct labor, $20, and factory overhead applied at 140% of direct labor cost if defective work is charged to a specific job and 150% if it is not.
Final inspection revealed that wheels were assembled with improper bearings. The wheels were disassembled and the proper bearings inserted. The cost of correcting each defective cart consists of $2 added cost for bearings, $4 for labor, and factory overhead at the predetermined rate.
Required: Prepare journal entries to record correction of the defective units and transfer of the work in process to finished goods if:
(1) The Wisconsin Wholesale Company order is to be charged with the cost of defective units.
(2) The cost of correcting the defective work is not charged to Wisconsin Wholesale Company order.
Assuming cost of defective units is charged to all the jobs, what is the unit cost of finished goods?
Chapter 2 Solutions
Principles of Cost Accounting
Ch. 2 - What are the two major objectives of materials...Ch. 2 - Prob. 2QCh. 2 - What factors should management consider when...Ch. 2 - Prob. 4QCh. 2 - What kind of information and data are needed to...Ch. 2 - How would you define the term economic order...Ch. 2 - What kind of information and data are needed to...Ch. 2 - What factors should be considered when determining...Ch. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Proper authorization is required before orders for...Ch. 2 - Prob. 13QCh. 2 - Prob. 14QCh. 2 - Prob. 15QCh. 2 - Prob. 16QCh. 2 - Prob. 17QCh. 2 - Normally, a manufacturer maintains an accounting...Ch. 2 - Prob. 19QCh. 2 - Why do companies adopt the LIFO method of...Ch. 2 - Prob. 21QCh. 2 - Prob. 22QCh. 2 - Prob. 23QCh. 2 - Prob. 24QCh. 2 - Prob. 25QCh. 2 - Prob. 26QCh. 2 - Prob. 27QCh. 2 - Prob. 28QCh. 2 - A manufacturing process may produce a considerable...Ch. 2 - After a product is inspected, some units may be...Ch. 2 - Order Point Pershing, Inc. expects daily usage of...Ch. 2 - Economic order quantity; order cost; carrying cost...Ch. 2 - Economic order quantity; order cost; carrying cost...Ch. 2 - Journalizing materials requisitions Penrose...Ch. 2 - Recording materials transactions Prepare a journal...Ch. 2 - PurrChems raw materials records contained the...Ch. 2 - Using first-in, first-out perpetual inventory...Ch. 2 - LIFO costing Using last-in, first-out perpetual...Ch. 2 - Using the weighted average method of perpetual...Ch. 2 - Prob. 10ECh. 2 - Renfro, Inc. was franchised on January 1, 2016. At...Ch. 2 - Recording materials transactions Craig Products...Ch. 2 - Recording materials transactions Broadwell...Ch. 2 - JIT and cost control Matsui Industries produces...Ch. 2 - Kenkel, Ltd. uses backflush costing to account for...Ch. 2 - For E2-15, prepare any journal entries that would...Ch. 2 - Davis Co. uses backflush costing to account for...Ch. 2 - For E2-17, prepare any journal entries that would...Ch. 2 - A machine shop manufactures a stainless steel part...Ch. 2 - Spoiled work Roger Company manufactures tennis...Ch. 2 - Defective work Herbert Electronics manufactures an...Ch. 2 - Perry Co. predicts it will use 25,000 units of...Ch. 2 - Prob. 2PCh. 2 - Economic order quantity; tabular computation Lopez...Ch. 2 - In P2-3, assume that the company desires a safety...Ch. 2 - Inventory costing methods The purchases and issues...Ch. 2 - Inventory costing methods The following...Ch. 2 - Terrills Transmissions uses a job order cost...Ch. 2 - Prob. 8PCh. 2 - Tuscany Products, Inc. uses a job order cost...Ch. 2 - Prob. 10PCh. 2 - JIT and cost control Langray, Ltd. produces 50,000...Ch. 2 - Backflush costing Russell Corp. uses backflush...Ch. 2 - Webster Company uses backflush costing to account...Ch. 2 - An examination of Buckhorn Fabricators records...Ch. 2 - One of the tennis rackets that Ace Sporting Goods...Ch. 2 - Lloyd Industries manufactures electrical equipment...Ch. 2 - Review Problem for Chapters 1 and 2 UltraLift...Ch. 2 - Financial and Nonfinancial Aspects of Changing to...Ch. 2 - Prob. 2MC
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Job Costing and Spoilage | Topic 2 | Spoilage, Re-work, and Scrap; Author: Samantha Taylor;https://www.youtube.com/watch?v=VP55_W2oXic;License: CC-BY